Mexican lawmakers gave final approval for

new tariffs

on Asian imports, broadly aligning with U.S. efforts to tighten trade barriers against China, as President

Claudia Sheinbaum

seeks to protect local industry.

Mexico’s Senate on Wednesday voted in favour of the bill that imposes tariffs of between five per cent and 50 per cent on more than 1,400 products from Asian nations that don’t have a trade deal with Mexico. The bill passed with 76 votes in favour, five against and 35 abstentions.

The new levies will take effect starting next year and hit a wide range of products from clothing to metals and auto parts, with the massive output of Chinese factories emerging as the legislation’s focus.

Passage of the bill took place against the backdrop of Sheinbaum’s high-stakes trade talks with

U.S. President Donald Trump

and pressure to match his priorities, fueling hopes Mexico’s levies on Chinese goods could ease punishing U.S. tariffs on goods like Mexican steel and aluminum.

While Sheinbaum has publicly denied any connection to Trump’s own tariff onslaught against the Asian giant, the new import levies resemble the U.S. leader’s approach.

For decades, Mexico has embraced free trade more than nearly any other country in the Americas, inking dozens of trade deals with nations all across the globe. But Sheinbaum’s leftist Morena party is now moving in a different direction.

Mexico’s finance ministry estimates the new tariffs will raise nearly 52 billion pesos (US$2.8 billion) in extra revenue next year.

Sheinbaum sent the proposal to Congress in early September, but lobbying from Asian governments and domestic opponents — from business lobbies and critical legislators — delayed its passage.

Manufacturers reliant on inputs made in China, India and South Korea, among others, warned of rising costs that could fan inflation. Some lawmakers, including from the ruling party, sought to avoid a dispute with a rising region many consider crucial to the diversification of Mexican export markets.

Sheinbaum’s embrace of the tariffs track with U.S. concerns regarding so-called transshipment of Chinese exports through other countries, and follow action by Canada last year to also emulate U.S. levies on

electric cars

, steel and aluminum from China.

 

On Thursday, the Ministry of Commerce in Beijing said it “hopes Mexico will correct its erroneous practices of unilateralism and protectionism as soon as possible.” China would closely monitor the implementation of the measures and assess their impact, the ministry added in a statement.

China runs a substantial trade surplus with Mexico. Last year it exported US$71 billion more than it imported, according to China’s customs data. While copper ore and concentrates could be a potential target if China decided to retaliate, Mexico would likely be able to find other customers given strong demand for the metal essential for the

renewable energy

industry.

According to the tariff legislation, Chinese cars will face among the steepest tariffs at 50 per cent. The country’s massive auto sector currently holds 20 per cent of the Mexican market, up dramatically from minimal vehicle imports just six years ago.

Mexican officials and local auto associations backed the import levies in a bid to protect national vehicle production, a major driver of Mexico’s manufacturing sector.

Along with the new tariffs, lawmakers approved a measure that will empower Mexico’s Economy Ministry, responsible for trade policy, to adjust the import levies as it sees fit.

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The measure states that the ministry “may implement specific legal mechanisms and instruments for the importation of goods from countries with which the Mexican state does not have a free trade agreement in force.” The provision cites the flexible mechanism’s goal of ensuring supplies of key imports under competitive conditions.

The policy could provide Mexican officials with useful tools ahead of next year’s review of the North American CUSMA trade pact with U.S. and Canadian negotiators.

With assistance from Alex Vasquez, Eric Martin, Cindy Wang and Philip Glamann

Bloomberg.com